LIVING TRUST

A trust is an arrangement under which one person, called a trustee, holds and manages property for another person, called a beneficiary. If you create a trust under your will it is called a testamentary trust. A "living trust", also called an "inter vivos" trust, is simply a trust you create while you're alive, rather than one that is created at your death. There are many different types of trusts that can be used in many different circumstances, and Mr. Siebert would be happy to help you determine which if any would be an appropriate part of your estate plan.

Different kinds of living trusts can help you avoid probate, reduce estate taxes or set up long-term property management. You can be the trustee of your own living trust, keeping full control over all property held in trust. A living trust lets you arrange how you want your property managed while you are alive and how your assets should be distributed after your death. Living trusts are popular because they are one way your property can pass to your heirs without going through probate. Be aware, however, that these trusts may not be for everyone.

Like a will, a revocable living trust lets you direct how and to whom your property will be distributed after your death. You appoint a trustee to manage your trust, just as an executor would manage your will. The trustee holds your assets and distributes them according to the instructions you specify.

Through the use of living trusts taking advantage of the marital exemption, a married couple may effectively double the amount of federal estate tax exemption. Accordingly, by using living trusts effectively, a married couple could pass twice as much money to their heirs without payment of federal estate tax based upon current tax rates.    

A trust can also be used to specify how your property will be managed during your lifetime, in case you become incapacitated. A trustee such as your spouse or another person or bank would then be authorized to step in and pay your household bills, medical expenses, insurance, taxes and in general keep your financial affairs in good order as long as necessary. Used in conjunction with Durable Powers of Attorney, any need for a guardianship would be eliminated.

With a living trust, estate settlement cost and expenses often can be substantially reduced. In essence, the trust would avoid the unnecessary costs of probating your estate through the probate courts.  Further, your living trust agreement is not filed in court like a will and so it does not become public record. Accordingly, the use of a Living Trust affords much more privacy to the family.

If you should have real estate in another state, then you should have a Living Trust. If you have real property in multiple states the real property in the non-domiciliary state would have to be probated also, in a second probate which is known as "ancillary" probate administration in that other state. Ancillary probate is very expensive in both time and money, and easily justifies the cost of a living trust.

A living trust provides a means for the administration of assets during one’s lifetime and to for the disposition of those assets at death, without probate and frequently at considerable savings in time and money. Mr. Siebert can assist you in setting up a Living Trust as part of your Estate Plan if such a trust would be beneficial to you.  

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